FIN 351 CHAPTER 6 QUIZ 21 TO 25

FIN 351 CHAPTER 6 QUIZ 21 TO 25

21. Comparing automobile sales to GDP shows that GDP seems to be more volatile than automobile sales.

22. When we regress automobile sales against GDP data, we find a high correlation between the two and a cyclical trend-line of automobile sales around the least squares trendline

23. The growth rate of the companies that make up the S&P 500 is an excellent proxy for the growth of mature companies

24. Companies in mature industries still have a dramatic need for internal cash flows to finance future growth.

25. Industries in the decline stage suffer from shrinking sales because product innovation has not increased the product base over the years

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